The daily deal market in China is getting tougher for all the players. That’s our general conclusion looking at the July numbers.
The top 10-20 players have to start finetuning on all levels as the impulsive “Just publish a deal” period seems to be coming to an end.

The Daily Deal websites are still boasting about their number of visitors/day (and the press uses this number to hype the phenomenon), but these numbers are relative, especially in China. Winning in the Daily Deal market is however more about attracting the right type of visitors, less about the amount of visitors. Quality beats quantity.

In this report we look as usual at market shares. QQ is doing very well, as it syndicates deals from several other websites and of course with its stake in Gaopeng, the joint venture between Tencent and Groupon.com. The Top 10 consists of the same 10 as last month although some positions changed. One position away from the top 10 is Gaopeng.

A new addition is the overview of deals per Region. The bulk of the deals are offered in the East and it gets less the more westward you travel.

With regard to the top deals Dianping is leading the pack as they offer a higher quality than the rest.

Not all deals are succesfull though, and as the number of failed deals (<5 sold) is increasing, we decided to look into the details. Some of the Daily Deal websites have lots of failed deals like QQ and Gaopeng. Others see only 0.5% of their offered deals being rejected by the users. That’s a huge difference.

Offering deals that in the end fail to convince the consumer is a lot of wasted energy and leads to disappointment of shops, consumers and daily deal websites themselves.
For some top 10 Daily Deal websites (revenue-ranking) that’s for sure a KPI that has to be improved if they want to consolidate their rankings.

We will closely follow the developments and report back on them in our August report where we for the first time will provide an in-depth city analysis.